Writedowns and Writeups Through Apollo Investment Corp’s Eyes.

27 August 2009

Mega-buyout firm Apollo Management has a lesser known BDC outfit called Apollo Investment Corp. (Nasdaq: AINV), which invests in CLOs, sub debt, second lien bank debt and warrants of leveraged buyouts.

But the interesting part of Apollo Investment is its co-investments. The firm makes equity investments alongside a number of well-known private equity firms. Because the firm is public, its quarterly report includes a number of not-otherwise disclosed write-downs and write-ups on portfolio companies of firms like GTCR Golder Rauner, Code Hennessy, Wasserstein & Co. and Madison Dearborn Partners. These mark-to-market values which Apollo holds its companies at are provided by independent third parties, not the general partners, a representative for the firm said.

Highlights include a number of gains. GTCR appears to be killing it on the firm’s investment in Sorenson Communications. The investment was written up 13,691%. Other big winners:

Sun Capital wrote up its investment in Garden Fresh by 105%.
Gryphon Investors wrote up its investment in Delta Educational Systems Inc. by 242%.
Odyssey Investment Partners wrote up its investment in machinery company Pro Mach by 109%.

On the flip side, Apollo Investment Corp.’s investments in companies owned by JPM Partners, Wasserstein & Co., Veronis Suhler Stevenson, and Centre Partners have taken some hefty writedowns, many as high as 100%.

Co-Investment Write-Downs and Write-Ups for AINV’s PE Deals